Is Google a black hole for companies it acqhires?

On May 11, 2005, I first used the term “acqhire” and was so amused with myself that I appended the post to define it: “When a large company ‘purchases’ a small company with no employees other than its founders, typically to obtain some special talent or a cool concept.” That post was about Google, then a mere $64 billion company, purchasing the two-person company, (Ever heard of it? Didn’t think so.)

Earlier this week, Slate ran a story that picked up a theme written about often — that small companies Google acqhires often end up in a black hole. I have no personal insight into what happens at Google and I can’t say I agree 100% with him, but Jason Fried — whose company, 37 Signals, has probably had plenty of opportunities to be acquired — has a great quote in the article that is worth repeating:

“You take great talents and you put them in this big company and they get drowned out by all this policy stuff,” Fried argues. “Putting a small company in a big company kills what was good about the small company.”

Here’s a MyBusiness magazine story I wrote about Jason in 2006 that explored his preference for keeping his company independent. From the time I spent interviewing him for the story and from being a user of his company’s products ever since, I’m glad he provides a balancing point of view to the notion that the only reason to start a business is to flip it. In the narrow niche that is covered by the tech blogosphere, that may be the goal, but for most small businesses in the real world, the magnet is independence and the opportunity to see an idea realized.

There will be no pity from me for those who have sold their startup to Google, only to see it sucked into a blackhole. Their product dreams may have been dashed, but they left with a lifetime’s worth of parting prizes. Next time, they’ll know better what matters.